BM461: Global Business Environment Report on Karen Millen Company

This report provides an in-depth analysis of the global business environment, specifically addressing opportunities for business expansion in emerging economies, using the Karen Millen Company as a case study. The report examines the benefits of global expansion, including increased demand, brand establishment, and a buffer against economic downturns. It also explores how governments utilize monetary and fiscal policies to stimulate economic activity and growth, with a focus on the UK government's approach. The analysis includes an explanation of monetary policy, its tools such as interest rate management, and its impact on economic growth. Furthermore, the report details the role of fiscal policies, including taxation and government spending, in influencing economic activity. Finally, the concept of trickle-down economics is discussed in the context of stimulating economic growth. The report concludes by summarizing the key findings and implications of the analysis.

GLOBAL BSUINESS ENVIROMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Presenting the emerging economy opportunities that helps the Karen Millen Company in
going for a global expansion........................................................................................................3
Government use monetary and fiscal policies to stimulate economic activity and progress......5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8
INTRODUCTION
Global business environment is described as environment in several sovereign nations
with elements exogenous to internal environment of company, include decision making
procedure on resource use. The current study is based on Karen Millen firm; this assignment is
based on two questions. First one will explain opportunities provide by emerging economies for
global expansion for business. Second question will clarify how government use monetary and
fiscal policies to stimulate economic activity and growth by using tripledown economics.
MAIN BODY
Presenting the emerging economy opportunities that helps the Karen Millen Company in going
for a global expansion
As the emerging market grows, it often results to rapid growth in the income as it sets out
to create. This is because as more and more people within the country rises out of poverty,
consumer class seems as developing which leads the market place full of the consumers who are
having the desire for buying the new products and the services. Right offerings combined with

the strategically selected market, an organization could expect a growth in their revenue at the
steady rate in right market.
In addition to this, emerging market or economies have started to drive for the global
innovation. This would help the Karen Millen Company in bringing innovation at low cost in the
emerging or developing market. Karen Millen Company can take various benefits with regards to
the business opportunities presented in the emerging market across the globe (Opportunities in
emerging economies, 2020). It provides for increased demand for the new types of goods
because such market contains growing upper class type of population in which the consumers
shows keen interest in buying luxury goods that were not available previously in a region. It
facilitates a great opportunity in establishing brand and eliminating the competition because an
emerging economy might be seen as the virgin territory for goods and the service provided by
the Karen Millen Company. This in turn allows the firm in capturing a large market share.
An enterprise can have an immense opportunity in relation to becoming part of the
economic system which is at the forming stage in case an entity decides for expanding its
business into the emerging market. For example- Deloitte, a largest financial firm, stated that
organization should expand its capability and capacity in emerging economies. It reflected that as
the large corporations in building power plants, dams and the roads, small scale business steps
into facilitating locals with goods and the services that they require. Thus, as the economy
develops, businesses might have better chance in building long run relationships with their
customers.
Emerging economies facilitates buffer against the recession as if the Karen Millen
Company operates only at one place, such business could be seen as more likely to suffer in the
situation when economy takes downward turn. Therefore, the main importance of operating the
business in several countries across the world is that it might be insulated from any ups & downs.
In case an entity is incurring loss at one place, another branch may help in making up over those
losses. Furthermore, the firm might benefitted from fluctuations in the value of conducting the
business in different types of the countries.
Moreover, Karen Millen Company can gain its reputation or prestige by creating a well
known presence and informing the local customers about their expansion. Running the business

at international level helps in earning new types of the business, more consumers and the fellow
business person enjoys in working with the Karen Millen Company whose reach has been
extended to abroad.
Global expansion is most effective and beneficial procedure, the planned expansion of a
organization business functions and activities into nations in different regions throughout the
globe. It implies more than just making investment in countries outside of firm’s home town, this
concept includes maintain an real business presence in those nations. Economic development and
growth provide range of benefits to company as it allow them to deliver their products or
services out of home boundaries at help them to reach at international level where they can gain
attention of new buyers who are seeking for quality goods or services with affordable pricing
structure. It can be said that emerging economies present chance for global expansion for
companies in effective manner as it help firm to become global leader by providing their services
into many nations or specific one which in return increase profitability, sales and productivity
level rather than before. It makes buyers able to purchase products or services according to their
needs as they have good income source. Benefits company gain throughout this activity that is
building their brand image across nations in systematic manner.
Government use monetary and fiscal policies to stimulate economic activity and progress
Monetary policy is macroeconomic policy laid down by central bank it includes
management of interest rate and money supply (Auclert, 2019). It is demand side economic
policy utilized by UK government to achieve macroeconomic objectives like growth,
consumption, inflation and liquidity. It measured employed by local and national authority to
influence and stimulate economic act, especially by manipulating supplies of credit and money
and by altering rates of interest. Aims of this policy are to maintain full employment, to achieve
high rate of economic growth and to maintain prices as well as wages. It is domain of a country
central bank like Bank of England of Great Britain is the biggest such bank in the whole world.
By managing quantity of money government stimulate economic growth, it provide
money to meet needs and requirement of varied sector of economy that may be increase pace of
same. Raising interest rate is mostly very good in reducing inflationary pressure and higher
interest rate enhance cost of borrowing and lead to slow down economic activity (Sang, 2019).
By providing money according to needs in specific market or sector government increase

economic growth rather than before, they allow them to progress more and more. Monetary
policy at recession ear will include cutting interest rates to attempt and stimulate investment and
spending. For example, in 1992 United Kingdom recession, cut in interest rate was quite
effective as it lead to economic progress. Low interest rate permit people to invest in any
business which makes them able to obtain better results or good incomes during recession
period. This situation occur due to high interest rate that affect economic growth negatively, so
government take action to cut it reduce burden on business & homeowners and allowed
economy to recover in effective manner.
Furthermore, it can be said that by using fiscal policies along with above one government
stimulate economic activity as well as growth effectively (Munir, Rao and Sana, 2019). This
includes changing government taxation and spending. Fiscal policies also include a shift in
authority budget position for example expansionary fiscal policy includes higher government
spending, tax cuts and a wider budget deficit. Government use this policy by reducing and
cutting taxes that stimulate and increase economic growth and activity. It allows companies or
businesses to supply their products in different market place which in return increase profit
margin, sales, productivity and generate more revenues that help in economic development.
With expansionary fiscal policy government creates jobs opportunities for local people
that directly influence economic activity by injecting demand into economy. It is very essential
and beneficial while recession because of it excess private sector saving which arises due to
paradox of thrift. It makes administration to used unused saving and idle assets to be put into
work. It analyzed that in deep liquidity trap and recession, fiscal policy work much better than
monetary because UK government can pay for new investment plans, creating employment
directly more than relying on other policies to indirectly boost business to invest. In simple
words, by using fiscal policy government offer the best jobs opportunities to local people who
can earn money and live their life as well as improve living standards more than past few years
which in return stimulate economic growth effectively.
Trickle down economics refer to economic proposition that taxes on companies and
wealthy in society must be reduces as mean to encourage business investment or spending in
short term and benefits community at large in long term period. By using this concept
government also stimulate economic growth and activity. Employment and taxation cutting are

key elements of this theory that drive economy towards increase more before and allow
individual to invest in small business which in return will develop in wider form that generate
more revenue by selling quality products or services. It effectively influence economic progress,
tickle down economics is simple term utilized to define belief that when high income earners
reach an increase in wage, then everyone in UK and other nation will benefit as their increased or
high income and wealth filter through to all areas in society that help in term of all beneficial
aspects.
CONCLUSION
From above analysis it has been conclude that emerging economies are beneficial for
business expansion as they provide change to reach at global level by increasing demand for
products or services.

REFERENCES
Books and journal
Auclert, A., 2019. Monetary policy and the redistribution channel. American Economic Review.
109(6). pp.2333-67.
Morakinyo, F.O., David, J.O. and Alao, J.A., 2018. Impact of Fiscal Policy Instrument on
Economic Growth in Nigeria. International Journal of Economics and Financial
Management. 3(1). pp.14-29.
Munir, S., Rao, Z.U.R. and Sana, S., 2019. Financial Development, Fiscal Policy and Economic
Growth: The Role of Institutional Quality in Pakistan. Journal of Finance and
Accounting Research. 1(2). pp.24-43.
Rafferty, D., 2016. Property Tax Abatements: Trickle Down Economics Du Jour.
Sang, T.M., 2019. Impact of Monetary Policy on Economic Growth: Empirical Evidence in
Vietnam. International Journal of Social Science and Economics Invention. 5(10).
pp.162-to.
Online
Opportunities in emerging economies. 2020. [Online]. Available through :<
https://smallbusiness.chron.com/advantages-doing-business-emerging-market-
22717.html>